The truth is a many layered onion

28 September 2010 – A student studying property has asked me, “Do you think “Green” Design and Development in residential properties is supported and progressive in Australia?”

There is some support by governments.

But when you add up what they do and subtract what they don’t do, Australia’s local, state and regional governments do not support sustainable residential development.

Let me count the ways they can help and ways they don’t:

Our governments do not:

1. Give rate rebates to private developers who design their projects to achieve savings that also reduce the depreciation of, or investment in, public infrastructure e.g. stormwater, transmission lines, electricity substations.

For example, a residential house may be forced to pay a “stormwater levy” by a council as part of a council-wide levy to raise money for works to reduce stormwater pollution but the house may be so designed that no stormwater leaves the site at all; thus, the private house owner has spent money – perhaps thousands of dollars on a rain tank and on site sewage system –  that confers a public benefit by stopping water running off from the site, but still be forced to pay to clean up the pollution caused by others.  Any rain tank rebate of a few hundred dollars is easily wiped out by the unfair stormwater levy.

2. Provide incentives for developers of multi-lot or unit residential projects, only for residents who are the owners of the buildings.

For example, units which might otherwise have solar panels more cost effectively installed in them when built only attract subsidies for the owners – often not to be found when the units are being built – and at that later stage the body corporate approval is required and that’s a very cumbersome and often fruitless process.

3. Fast track sustainable development ahead of unsustainable development for either owners of individual projects or developers of multi-lot residential projects.

This, I think, is the single greatest barrier to sustainable development becoming mainstream. If a private citizen or developer company knew their project would be decided quicker if it was sustainable I expect there would be an overnight switch from unsustainable projects. Holding costs, consulting fees, the time taken up with approvals is a huge disincentive to innovation.

And if there were a simple, measurable definition of “sustainable” development so anyone could just tick boxes to qualify for fast-tracking then there’d be no gaming of the system, no rorting and no confusion about what projects are entitled to be fast-tracked (I’ll spell out an example of what would work here in another Burr. For the moment, let’s anticipate that the definition would be projects that score a very high score under BASIX, First Rate, NABERS, etc).

4. Prevent government owned businesses from exploiting their market power and the legislation they have enacted to protect their businesses to prevent energy and water efficiency. For example, they may require a sub station on land, (typically without compensation to the land owner) which really provides additional power for other projects, not for the sustainable project.

For example, they may require car parking when the owner or multi lot developer does not wish to provide it and prefers to use a car share scheme and may even wish to contribute to the cost of providing the car share car at the riskier set up phase but the council will refuse to allocate a dedicated car space for the car. Note: a car share car typically replaces six to nine privately owned cars and in one a project council engineers wanted a project refused because a developer had the guts to test the market by wanted to omit car spaces in the building. The council approved the project but required the developer to contribute over $700,000 so the council could build the car spaces in its own car park. That was over five years ago and the developer’s money still sits in the council’s bank account earning the council interest and there’s no plan to build the car spaces because there’s no demand for them either at the project or in the council’s car park.

And many councils prop up government energy, water and transport monopoly businesses by working standard conditions of approval so a developer cannot turn one sod of soil until approval is also obtained from the government agencies. Thus, a developer which proposed to redevelop a site with a two-storey building into a four- storey building but use less power than was already supplied to the site was forced to put in an electricity substation to serve not the interests or demands of that sustainable, low energy-using project but to meet the rapidly growing demand for electricity by nearby energy-hungry projects. In addition, the developer had to provide the land for the substation free – as the land was in the heart of valuable city land. That was over $700,000 the developer gave to the energy company (Energy Australia – yes, the very same entity claiming to be “green”, selling PVs, blah, blah, blah). In this and the other rort mentioned above the developer obtained no support from council or the “green” councilors.

The project is here.

5. Insist on minimum professional educational requirement for real estate agents or valuers by which they would be skilled up to sell, buy and value sustainable projects. The consequence is that most of these key players know very little about market values for sustainable property.

6. Provide data, freely published, on actual costs, comparative efficiencies and actual savings achieved in living costs with solar hot water or solar panels or on-site sewerage. In the absence of costs data it’s difficult for the novice home builder or renovator to know how best to buy and install sustainable infrastructure.

For example, a home owner may agonise over which type of solar panel to buy when that’s probably the least important question. The key question, I think, is: will the folk who install my solar system be around in five years to honour any warranties and guarantees? Will the system be built competently so it in fact delivers the promised amount of solar electricity? Most residential owners do not think to make final payment conditional upon the system delivering the promised amount of solar electricity.

7. Remove very restrictive and costly rules about the use and operation of on site sewerage systems which can add up to 50 per cent of the capital and operating costs. These rules are perhaps the least justifiable and most poorly founded of all the rules affecting sustainable infrastructure for both residential and commercial projects.

8. Offer reductions in fixed charges in most of Australia for energy and water efficient projects, including on-site sewerage, where those systems either do not use the government owned monopoly water or energy service provider or the privately owned provider. Thus, a home owner may not use water or a sewerage system provided by a local council or a government monopoly service provider but still be obliged to pay fixed charges for those unwanted services. By comparison, if I choose not to use Telstra for my phone then I don’t have to pay Telstra even if their line is outside my house.

9. Remove unnecessarily complex and technical rules that compel the private owner to use consultants to obtain approvals, increase the approval time and costs by many thousands of dollars.

10. Make laws making it fair and profitable for private sector transport, water, sewerage and energy infrastructure to compete with government-owned monopolies.  If they did, few of us would choose to buy transport, energy, water or sewage services from government businesses.

At last the Australian Tax Office has made this major barrier to sustainable use of resources central to whatever the federal government does over the next three years.  The ATO’s advice to the incoming government about the country’s economic future has been published because of the three Independents and now we know – and the government knows – that the government has been told to undo the barriers to private sector competition.

Yes, but will the Greens allow the private sector to build thermal solar power stations and compete with government businesses which burn coal? Will they allow the private sector – that’s you and me, the ordinary citizen – to choose to provide their own water and sewerage services or to buy them from a private provider? It’s not as if the Sun looks down and says, “Oh, gosh, that clean electricity is coming from a private power station so I won’t take that into account when I decide whether or not to change Earths’ climate”, is it?

The question I was asked, was, “How does the economy effect this?”

The impacts above are caused by governments. They are avoidable. The impacts typically make sustainable development more expensive and time-consuming than private development. Thus, there is always a bias in the market place towards unsustainable development no matter the prevailing economic conditions and this bias is exacerbated in times of financial uncertainty. If it cost the same to go sustainable as to go unsustainable then sustainable development would become the norm even in difficult financial times, and perhaps more so due to the savings in living costs for water and energy.

There is almost no requirement for governments to account for the costs to citizens of compliance with their regulations.

Why is the issue important in the context of property?

There are two key issues here.

One is that those who know most about the higher costs to citizens and property owners caused by complex and unnecessarily technical red tape – consultants and experts – have the least incentive to actively campaign to persuade governments to reduce the levels of red tape and costs they generate. A consequence of simpler rules would be a drop in their consulting income. And it’s often not clear to the individual, once-off residential developer what is going on and they have no ready champion to look to to simplify things. Individual property owners do not have the industry-wide lobbyists that multi-lot property developers do. And the property industry finds it difficult to lobby for change due to the absence of data about costs for private residential developers compared to costs they incur.

The other is that governments may make red tape without being forced to achieve a level of simplicity, affordability and accountability for the impacts of the red tape except for the cost of the red tape to government. Nor are governments required to independently audit the outcomes of their “sustainability” rules. Thus, the amount of energy used in homes in NSW and Victoria has risen despite the government rules which were promised as a way of cutting energy use (BASIX and First Rate). It was a study carried out by the Alternative Technology Association, which demonstrated this outcome, not a study carried out by the state governments or some independent auditor.

Thus, there is now an established tradition of local, state and federal governments making rules about sustainability and promising savings in energy and water use but not, at the same time they make those laws, obliging the agencies administering them to submit to independent scrutiny of the effectiveness of the laws. Examples that come to mind include the insulation scandal at federal level but that story is repeated at all levels of government and persists in the absence of auditing.

The truth is a many-layered onion, don’t you think?

Bathurst Burr: Xanthium spinosum Linnaeus has been declared a noxious weed in all state.

*Bathurst Burr: A burr under the saddle of government, red tape and sustainability police

Michael Mobbs is a sustainability coach who works with developers, governments and communities to design and obtain approvals for houses, units and subdivisions. He is based in the inner Sydney suburb of Chippendale, where in 1996 he pioneered the conversion of his inner city terrace into a sustainable house, which has now been disconnected to mains water and sewerage and is powered by solar energy. www.sustainablehouse.com.au